Intelligent Enterprise Foundations

From Digital to Intelligent

What is the “intelligent enterprise” ? It is a strategy that enables you to transform data into action across all lines of business — driving process automation and innovation, unlocking new areas of growth, and delivering exceptional experiences.

As Canadian enterprises face the challenges of shifting customer demands, emerging global competition, a growing skills shortage, and a quickening pace of innovation, business and IT leaders recognize the value of building intelligence into every facet of business. And the foundation is digital.

The intelligent enterprise can realize value in different ways, such as faster delivery times through optimized supply chain planning, more precise resource extraction enabled through sensor data and analytics, rapid product development driven by digitally captured customer feedback, system automation made possible through digital process enhancement, and improved staff engagement through systematic employee experience programs.

One of the most compelling outcomes of the intelligent enterprise is that enhancements positively impact customer relationships and the uptake of new offerings.

For example:

"We drive over 20,000 predictive recommendations to customers every week, with over a 47% conversion rate."

Wellington Holbrook, Chief Transformation Officer, ATB Financial

"With smart meters … we have gained better insights into our customer usage habits and patterns. And now we're able to provide new services to them to help them better manage their electricity usage and offer potential solutions to help them reduce those costs."

Robert Wong, CIO, Toronto Hydro

Canadian Organizations Are on a Journey to Become Intelligent Enterprises

To become an intelligent enterprise an organization must establish a formal digital strategy. Over the past four years, through IDC’s and SAP’s joint studies of digital transformation, we have observed progress in the formulation and execution of a digital strategy by Canadian organizations.

In our 2019 survey we found that 85% of Canadian enterprises have established a formal digital strategy, compared with 76% in 2017, with the majority down the path of becoming intelligent enterprises. Canadian enterprises are also more confident in their digital strategy in comparison to peer organizations: 30% said they “exceed peers” or are “best in class” in 2019 versus 22% in 2017, with fewer now claiming to lag their peers.

To help illustrate this progress IDC developed a model to categorize Canadian enterprises along a four-stage scale, with the corresponding labels:

  1. Observer: low adoption of building block and innovative technologies, disconnected line-of-business digital initiatives, limited focus on experience management
  2. Participant: some focus on enterprisewide digital initiatives but still low use of building block technologies
  3. Challenger: increasing focus on integrated enterprisewide digital innovation, but not all functional departments are engaged in digital strategy
  4. Leader: advanced use of technology, integrated and continuous enterprisewide digital innovation, tight linkage between employee experience and customer experience

The Intelligent Enterprise Overall Progress Scale was developed using data captured in the SAP-IDC Intelligent Enterprise survey of 303 Canadian organizations. IDC used three key questions asking about an organization's (1) strategic focus, (2) technology readiness, and (3) organizational readiness. The distribution of organizations is shown in Figure 1

IE Overall Progress Scale

Figure 1

Technology Readiness

Building block technologies, such as cloud infrastructure, data management, and analytic tools, and newer innovative technologies such as IoT, machine learning, and AI enable an organization to become an intelligent enterprise. In the SAP-IDC IE survey we found a clear linkage between the deployment of these technologies, as well as the related skills, and progress toward IE leadership. Executing on a digital strategy means that organizations need to be agile and have the foundation in place to sustain changes in demand for compute capacity, real-time analytics, and digital customer service.

IE Leaders were more likely to be ready across all technologies, particularly cloud server/storage and productivity collaboration solutions. Similarly, IE Leaders commonly use over three innovative technologies on average, while IE Observers use less than one (see Figure 2).

Innovative Technology Adoption

Figure 2

IDC interviewed several organizational decision makers to better understand what it takes to become an intelligent enterprise. A common theme was the importance of establishing a solid IT foundation. There’s a recognition that technology is one of the key solutions to help drive efficiencies and cost savings, to enable automation, and to enhance customer and employee experience.

"Automation on the rig and streaming large volumes of high fidelity data from sensors allows us to gain more insights about the well that we’re drilling for the customer.”

Darren Ruhr, Chief Administrative Officer, Precision Drilling

"We have to leverage a lot of IoT, a lot of machine learning … that's the only way we're going to be able to optimize, stabilize, and manage the grid when you have all these disparate points generating and distributing electricity."

Robert Wong, CIO, Toronto Hydro

Organizational Readiness

Beyond the technology itself, a mindset or culture within the organization is required to become an intelligent enterprise. Specifically, the level of engagement among senior leaders and the clarity to which the digital strategy is articulated contributes to success. The SAP-IDC IE study found that 80% of IE Leaders have executive management “enthusiastically engaged” in digital strategy execution, compared with a mere 9% of IE Observers. Without that enthusiasm organizations fail to shift the culture of teams that execute the digital strategy. Figure 3 compares the level of enthusiastic engagement across different functional groups.

IE Organization Readiness — Level of Engagement Among Groups

Figure 3

The notion of enthusiastic engagement relates to a key finding from the 2018 SAP-IDC study of digital transformation, and that was the significance of digital change agents: leaders that bring a vision and energy who are also able to gain consensus within and across teams and through different levels of the organization. This creates a clear pathway to the intelligent enterprise. This was echoed in our 2019 study.

"Spend the time up front on your process design and get buy-in from bottom up or top down, but make sure that people really understand what the new process is and that you're going to fully leverage the system."

Darren Ruhr, Chief Administrative Officer, Precision Drilling

The Intelligent Enterprise:
A New Foundation for Organizations Globally

Legacy systems are no longer satisfying business needs because of inefficient access to fresh data, archaic business processes, and constant configuration changes. Many companies have accumulated "technical debt" defined as unfunded critical technology liabilities including the risks associated with legacy systems that need to be retired, replaced, or modernized. To move beyond this state, enterprises are enabling a new technology foundation utilizing what IDC calls intelligent ERP applications, or i-ERP.